How The Top Brands Are Recruiting First-Time Buyers In China

Key Takeaways: Only 8 percent of consumers consider themselves to be firmly committed loyalists to their favorite brands, according to a Nielsen's Global Consumer Loyalty study. First-time purchasers have a greater susceptibility to their social surroundings, as younger consumers crave validation and need to make purchases that communicate social standing and individuality. Luxury powerhouses like Louis Vuitton and Gucci — as well as athletic footwear and clothing brand Nike — recruit first-time purchasers by meeting them at every touchpoint. “Only 13 percent of post-’80s/’90s luxury spenders said they grew up in a family familiar with the finer things in life, while half of post-’90s [buyers] and 31 percent of post-’80s consumers, only made their first luxury purchase in the last year,” according to a report by McKinsey & Company. In short, millennials and Gen Zers didn’t grow up with luxury and came to know this extravagant world only recently. Consequently, their perspective on luxury and their shopping behaviors are different from those of older luxury consumers. Furthermore, first-time purchasers are much more likely to be susceptible to their social surroundings. Being younger consumers, they crave validation, and they need to make purchases that communicate social standing and individuality. Young Chinese consumers “see luxury as a form of social capital that helps mark them apart, and achieve personal and social goals,” says McKinsey & Company. Therefore, luxury brands that use positioning strategies to make their brand distinctive can influence consumer preferences. But the downside to the continuous chase for individuality and novelty is consumer disloyalty. According to a Nielsen's Global Consumer Loyalty study, only eight percent of consumers consider themselves to be firmly committed loyalists to their favorite brands. Nevertheless, not all luxury brands adapt their marketing communications methods and content strategies according to this new reality. Let’s have a look at the luxury brands that understand the importance of creating a new form of emotionally-connected retail and see how they recruit first-time purchasers. Every touchpoint counts Luxury powerhouses like Louis Vuitton and Gucci, or athletic footwear and clothing brand Nike, recruit first-time purchasers by meeting them at every touchpoint. Take Gucci, for example. The world’s fastest-growing luxury brand is an e-commerce trailblazer, launching its US e-commerce site in 2002. Since then, the company has continually innovated and created more value for investors, buyers, and consumers alike. Juan Manuel Gonzalez, the founder of the e-commerce development agency G & Co., believes that Kering’s investments into digital functionalities like its single cross-channel customer database and its reserve online/pickup in-store feature have helped safeguard Gucci’s philosophy of “brand first, channel second.” This strategy also helps create personalized experiences and a frictionless customer experience across all touchpoints. Buying Gucci products online “is an experience that mirrors its runways: each ready-to-wear look is sold as pieces of the outfit that appeared on the catwalk,” according to Digiday. “They have brought to life their world — it’s curated in a way that it represents the life of the Gucci woman in a very smart and subtle way, while still making the consumer feel that they want to live in this world,” said Ian Schatzberg, president of the creative agency Wednesday, to the magazine. But Gucci has gone even further in attracting first-time buyers while also generating high engagement by working with influencers and celebrities in China such as Li Bing Bing, Yang Mi, and Ni Ni. Louis Vuitton, on the other hand, maintains its prime market position by recruiting and engaging with first-time purchasers via immersive brand experiences. From art exhibitions and interactive museum experiences to artistic collaborations, Louis Vuitton has envisioned a world in which art and fashion merge to create a refined, hypnotizing reality. Now, the French luxury house is using digital media platforms to communicate its cultural sensibilities to youthful, first-time purchasers. But Louis Vuitton and Gucci do not only build awareness through their own channels; they also do it through collaborations with streetwear brands, television celebrities, artists, competing brands, and even resale platforms that command high engagement. Meanwhile, Nike, a brand known to advocate for social justice and corporate social responsibility, has partnered with athletes like Serena Williams, LeBron James, Roger Federer, and Colin Kaepernick because they are engaged in social action. Alongside these partners, the brand has used emotional marketing to sell higher values and build longer-lasting customer relationships. Since younger luxury buyers like Gen Zers are pro-social consumers who care deeply about social issues, Nike’s branding strategy is a hit with them. And Nike’s content strategy in China is also on point, as the American sportswear brand is genius at storytelling and creating engaging content. These strategies have worked very well in China, where Nike’s revenues surged 21 percent in 2018 to 5.13 billion, accounting for 14 percent of Nike’s total global sales, according to Daxue Consulting. Moreover, in 2019, sales in Greater China were up 20.9 percent from 5.13 billion to 6.21 billion. By creating a democratized form of retail, these Western brands do not only reach the consumers who can afford luxury but also prospective buyers of the aspirational class. It is a branding strategy that encourages emotional experiences and impulse purchases while also strengthening brand equity.

How The Top Brands Are Recruiting First-Time Buyers In China

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Published January 03, 2021

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How The Top Brands Are Recruiting First-Time Buyers In China